Australian Mines will pay an exercised option fee of AU$600,000 to Jervois Mining to acquire 100 percent of Flemington, which is one of New South Wales’ most advanced cobalt projects.
Australian Mines will pay an exercised option fee of AU$600,000 to Jervois to acquire 100 percent of Flemington, which is one of New South Wales’ most advanced cobalt projects.
To complete the deal, which is expected to close in mid-October, Australian Mines will have to make a final payment of AU$3.4 million.
“We remain optimistic about significantly increasing the mineral resource inventory at the project, given that only 1 percent of the prospective geology at Flemington has been comprehensively evaluated,” said Benjamin Bell, managing director of Australian Mines.
According to an existing mineral resource estimate, the Flemington project has 2.5 million tonnes at 0.103 percent cobalt and 403 parts per million (ppm) scandium in the measured category. Meanwhile, in the indicated category, the asset has 0.2 million tonnes at 0.076 percent cobalt and 408 ppm scandium.
“Our early modelling of the cobalt grade, host geology and potential mineral resource tonnage at Flemington has demonstrated significant exploration potential,” Bell added.
Looking ahead, Australian Mines anticipates starting drilling at Flemington immediately following the completion of the current 50,000-meter resource expansion drilling program at the company’s Sconi project in Queensland.
“We look forward to getting a drill rig back out on the ground at the project to further evaluate the scale of the opportunity we have with Flemington and potentially develop it into a valuable second production source of cobalt, nickel and scandium for Australian Mines, following our flagship Sconi project in Queensland where we are nearing completion of a bankable feasibility study,” Bell explained.
Once Australian Mines receives and models the results from the proposed drilling at Flemington, the company expects to release an updated mineral resource estimate and start a prefeasibility study on the project in early 2019.
On Monday, shares of Australian Mines jumped 10.81 percent in Sydney, closing at AU$0.82.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.